Yellow metal snaps losing streak on dollar weakness
Gold futures scripted a rebound in the domestic and overseas market on Thursday as the recent sharp run of losses in the precious metal amid the Gold’s loss of appeal as a store of value on fears over a US interest rate hike and diminishing safe haven demand on waning Greek and China worries, offered investors and speculators, a good bargain buying opportunity in the yellow metal, at existing levels.
Further, a weaker dollar also boosted the demand for Gold as an alternative asset. Weaker greenback makes Gold cheaper for those holding other currencies, thus bolstering demand.
However, better than expected US labour market data which showed a slump in applications for jobless benefits to a four-decade low bolstered the case for the US Federal Reserve to start raising interest rates for the first time since 2006, in the coming months, dimming the yellow metal’s lure as a store of value, capping gains in Gold futures.
The bullion today may come under renewed selling pressure amidst worries over Fed rate tightening and caution ahead of key US economic data including new home sales for June and July manufacturing data.
At the MCX, Gold futures for August 2015 contract closed at Rs 24,951 per 10 gram, up by 0.30 per cent after opening at Rs 24,987, against the previous closing price of Rs 24,877. It touched the intra-day high of Rs 25,113.